With limited earnings reports and changes in analyst ratings, Friday's PreMarket Prep podcast focused mostly on the broad market and issues of interest from our listening audience.
Trade Tensions Met With Muted Response
Trade tensions surfaced in Wednesday's after-hours session when President Donald Trump signed legislation that for the most part backs Hong Kong's independence.
That news instigated a quick decline that went no further than Thursday's low in the S&P 500 futures indexes and rebounded. In premarket trading following the decline, in the index was able to sneak into the 3,150 handle, but came up shy of Wednesday's all-closing-high price of 3,153.75.
Both hosts of the show were surprised that more damage had not been done and were cautiously bullish for the session. Co-host Dennis Dick said that with the index at an all-time-high, he may trim some swing long positions ahead of the weekend, but is not yet ready to short the market.
Buffett's Black Friday Buying Effort Thwarted By Apollo
Outside of the deal itself, it should be noted that Buffett is attempting to put his cash horde to work and not necessarily in any of his current holdings. It's potentially a signal from Buffett that the rally in the broad market may be extended heading into year-end.
Coca-Cola, Kellogg Go Ex-Dividend
Issues with higher-than-average dividends are often discussed on PreMarket Prep, as some investors employ a dividend capture strategy.
This allows income-seeking investors to purchase a stock weeks or a day before their ex-dividend date and exit the day it is paid or shortly thereafter.
The key to this strategy is to purchase the issue at a cheap enough price that that all profits are not wiped out when the dividend is subtracted from the price the day after it is paid. Ex-dividends date may sometimes signal a short-term top in an issue.
Investors employing this strategy must note the adjusted price for an issue — the previous day's close minus the dividend — to determine their exit strategy.
Marc Chaikin Joins The Show
Marc Chakin of Chaikin Analytics joined the broadcast Friday, expounding on his bearish thesis for Tesla Inc (NASDAQ: TLSA) and Netflix Inc (NASDAQ: NFLX) and reiterating his year-end 3,200 price target for the S&P 500 Index.
On Monday's show, Anne-Marie Bayind, author of The Tradingbook.com, will be our guest at 8:15 a.m.
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